Could House Republican reforms that limit or eliminate guarantees on mortgages to low-income borrowers effect credit union lending?

Yes, said CUNA Chief Economist Bill Hampel. Tighter secondary market standards could indeed affect credit unions that serve riskier borrowers, which Hampel said would be “a shame because not all loans to riskier borrowers are ‘bad mortgages’.”

Credit unions held most of their new mortgages on their books pre-crisis, Hampel said, which resulted in lower loss rates.

“This suggests credit unions were successfully lending to all types of borrowers,” he said.

However, interest rate risk makes holding any significant amount of new mortgages on the books “perilous,” Hampel said.

“This is why it is so important that credit unions have unencumbered access to the secondary market, to be able to lend when interest rates are too low for loans to be funded by shares and deposits,” he said.